Insanity? Why A Bootstrap Entrepreneur Raised $17 Million in Venture Funding(onstartups.com)
onstartups.com
Insanity? Why A Bootstrap Entrepreneur Raised $17 Million in Venture Funding
http://onstartups.com/home/tabid/3339/bid/5241/Insanity-Why-A-Bootstrap-Entrepreneur-Raised-17-Million-in-Venture-Funding.aspx
4 comments
I would be more impressed if he had already built a sustainable company to a point that the company is generating more cash than he knows what to do with, but he is putting $17M into his own pocket and give up 10% of the company such that he can continue to build and morph it into a $1.7B company (10X again). Reading the article, it was not clear why he did it except to say that he now has $17M in the company's bank. It is even less clear why he brags about it. My own past experience is that whenever I boasted that I was the smart parrot who swallowed a fat mouse, I always ended up having to deal with indigestion. I think he is a great entrepreneur but I am curious.
Sorry it was not clear in the article, but here's the basic decision:
1. Have a large percentage of a modestly-sized pie
2. Have a smaller piece of a very large pie
Of course, there's always the "large percentage of large pie" option, but that seems to be pretty rare.
I've done Option #1 already and wanted to take a shot at Option #2. It's really early in the process, but there's enough reason to be hopeful.
Apologies if the article came off as boastful. I didn't know how to say it any other way without compromising truthfulness and making my larger point -- i.e. the VC game is a tough game unless you've got some leverage, and most entrepreneurs are better off working on the business in the early stages.
1. Have a large percentage of a modestly-sized pie
2. Have a smaller piece of a very large pie
Of course, there's always the "large percentage of large pie" option, but that seems to be pretty rare.
I've done Option #1 already and wanted to take a shot at Option #2. It's really early in the process, but there's enough reason to be hopeful.
Apologies if the article came off as boastful. I didn't know how to say it any other way without compromising truthfulness and making my larger point -- i.e. the VC game is a tough game unless you've got some leverage, and most entrepreneurs are better off working on the business in the early stages.
Dharmesh - thanks for the additional comment. I was not trying to be disparaging. Congratulation and look forwarding to seeing your continual success. High tide raised all boats. Good news for one is great news for all.
I don't think it's boasting but rather trying to explain away an apparent contradiction.
Interesting and personal account. I liked the fact they are frugal with the money even though they have "millions in the bank".
OnStartups explains why someone who advocated low-cost, efficient startups went out and raised not one, but two venture capital rounds for his latest company.
Nice example that shows you don't have to EITHER bootstrap OR raise investment. You can do both. Thanks.
I spose there are differences between 'pure' bootstrapping and raising 17m but saying you're still bootstrapping. Firstly,this guy has experience 'truly' bootstrapping, so I see no reason do doubt his word, but if this is your first try and you raise money promising to bootstrap, you may still end up with wildly different spending patterns to a true bootstrapper. Secondly, they will have given up a lot of equity, and perhaps board seats, for all that money, unlike a true bootstrapper; that shift in control dynamics may, again, be a significant difference. So don't assume that this article means big money'll make no negative difference to how a business is run if you 'say' you're going to stick to bootstrapping, versus the true bootstrapping route. (it may well be that the positives outweigh the negatives)